Intel Expected to Sell Unprofitable Cell Phone Chip Division

6:30 am on June 7, 2006 | Category: Business, Cell Phones, Cellular, Corporate, Mobile Devices

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With competitive pressure mounting, Intel is having to make some tough decisions. The company may be forced to sell the bulk of its communications business to focus on its core market of computer chips.

Although Intel hasn’t yet commented on its exact plans, the Wall Street Journal reports that the chipmaker has started contacting potential buyers for its financially unsuccessful mobile phone and networking chip businesses.

Intel’s XScale chips have been popular in a few high-end phones, but the vast majority of its lower level cell phone chips have had very little or no success. The company’s CEO Paul Otellini has admitted that the company is only a “niche player” in the market for mobile phone chips, probably hinting that the unit wouldn’t be a long-term focus.

Selling unprofitable divisions will almost certainly be part of the company’s long term plan to restructure operations, and compete more effectively with AMD in the global computer chip market.

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    Edited by Jeremy Maddock